Incorrect credit reports can ruin your credit

By Jack, on June 24th, 2014

But getting them fixed can be almost impossible.

Incorrect entries on your credit report (such as the failure to show that a previous debt has been paid off) can reduce your credit score and make it hard (or even impossible) for you to get credit. There are laws and regulations governing the credit reporting agencies that require them to correct these mistakes, but they do a lousy job.

As Gretchen Morgenson writes in the New York Times, “The three largest credit reporting companies — Equifax, Experian Information Solutions and TransUnion — issue more than three billion consumer reports a year and maintain files on more than 200 million Americans. Under the Fair Credit Reporting Act, these agencies are supposed to have procedures assuring “maximum possible accuracy” of consumers’ information. The law allows consumers to check the reports for errors and requires credit bureaus to investigate consumers’ error claims. The agencies are also supposed to deliver to creditors all information relating to those errors so they can be corrected.”

Unfortunately, the credit reporting companies are paying no attention to the law, says Morgenson. She reports on a lawsuit filed last month against Experian by Jim Hood, the Mississippi attorney general:

“Experian has, over more than two decades, engaged in an unyielding pattern and practice of violating state and federal law,” Hood argued. “The company has paid tens of millions of dollars in judgments and settlements to consumers across the country,” but it has “refused to take the steps necessary to conform its conduct to the law.”

To find out how to check your credit report and learn what you need to do to fix mistakes, click here.